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keethrax
keethrax Reader
4/8/11 9:34 p.m.
Toyman01 wrote: Running a deficit every year isn't sustainable.

Actually it is infinitely sustainable. Well a small one is. One can even make a pretty solid case for running a small (that's a key word) deficit every single year is the ideal answer and healthier than balance (I could certainly make a case for it, just like I could make a case that balanced is better as well).

But those are not the kind or size deficit we're running here, so don't take that as disagreement with what you meant just with what you said.

Those who just go "deficit=bad" and jump up and down ala teabaggers frankly don't have a grasp of real world economics sufficient to explain to them why they're wrong (I'm not lumping you in that group, or I wouldn't have bothered replying). That being said, there's a big difference between a small and well chosen deficit every year and spending like a drunken sailor.

Those people also don't grasp why reducing the deficit by immediate massive cuts (or, theoretically, immediate big tax increase I guess) is a recipe for disaster. On the other hand there's a big difference between solid gradual cuts and token BS cuts as proposed by both sides. Neither side is cutting out of fiscal responsibility they're cutting token amounts and sniping at politicaly convenient targets instead of fiscally irresponsible ones. Like I said elsewhere, I don't necessarily disagree (much) with their target endpoints, but the path taken to get there is important.

keethrax
keethrax Reader
4/8/11 9:42 p.m.
tuna55 wrote: I would not suggest raising it, but I would recommend that more corporations pay it. See GE and National Instruments for two very good examples of this.

I have an acquaintance who is a leading tax lawyer for a major corporation (and I do mean major). And it's his explicit job to berkeley over every single one of us.

Even after finding as many loopholes as possible, they don't pay what's left over.

The process goes like this (with small #s to make it easier to type):

Let's say they owed $100 before loopholes.

They find $45 worth of loopholes. Now they owe $55.

They pay $10.

The IRS says: "Hey you paid us $10 when you owed us $55)

They say: Really?

IRS: Yep

Them: Hunh. We'll look into it.

some time passes...

IRS: Hellooo?

Them: Oh, sorry you're right. Here's the rest. (they hand over another $5 for a total of $15 of $55 or $100 depending on how you look at it)

IRS: That;s still not nearly the right amount

Them: OK, well we disagree so it'll have to go to court.

IRS: To court it is then.

more time passes

Them: How about we pay you another $10 and we drop the case. It's probably about right, and saves you time effort. Besides, you might even lose the court case.

IRS: Make it $15.

Them: OK here's $15 (for a total of $30 out of $55 or $100)

tuna55
tuna55 Dork
4/8/11 9:48 p.m.
keethrax wrote:
tuna55 wrote: I would not suggest raising it, but I would recommend that more corporations pay it. See GE and National Instruments for two very good examples of this.
I have an acquaintance who is a leading tax lawyer for a major corporation (and I do mean major). And it's his explicit job to berkeley over every single one of us. Even after finding as many loopholes as possible, they don't pay what's left over. The process goes like this (with small #s to make it easier to type): Let's say they owed $100 before loopholes. They find $45 worth of loopholes. Now they owe $55. They pay $10. The IRS says: "Hey you paid us $10 when you owed us $55) They say: Really? IRS: Yep Them: Hunh. We'll look into it. some time passes... IRS: Hellooo? Them: Oh, sorry you're right. Here's the rest. (they hand over another $5 for a total of $15 of $55 or $100 depending on how you look at it) IRS: That;s still not nearly the right amount Them: OK, well we disagree so it'll have to go to court. IRS: To court it is then. more time passes Them: How about we pay you another $10 and we drop the case. It's probably about right, and saves you time effort. Besides, you might even lose the court case. IRS: Make it $15. Them: OK here's $15 (for a total of $30 out of $55 or $100)

Pathetic, eh? I'm one of them teabaggers who doesn't understand basic math and all, but I'd say flat tax for everyone. 15% or whatever for every man, woman, family, corporation. No deduction, no loophole, no incentives, nada. GE makes eleventy billiion? Great job, give the federal govt 15% of it. My family makes 50K? Nice work, give the federal govt 15% of it.

keethrax
keethrax Reader
4/8/11 9:51 p.m.
tuna55 wrote: Pathetic, eh? I'm one of them teabaggers who doesn't understand basic math and all, but I'd say flat tax for everyone. 15% or whatever for every man, woman, family, corporation. No deduction, no loophole, no incentives, nada. GE makes eleventy billiion? Great job, give the federal govt 15% of it. My family makes 50K? Nice work, give the federal govt 15% of it.

Flat rate tax is a terrible idea for tons of reasons, but that's neither here nor there. But that doesn't mean simplifying the tax codes to the point where loopholes are a lot scarcer isn't a good idea.

EDIT: Short version: Rate and loopholes are two issues. You can have a very, very simple tax code and still not have a flat rate. So bringing up one in response to the other isn't terribly relevant.

fritzsch
fritzsch New Reader
4/8/11 10:06 p.m.

I wish social security tax could be taxed up to an infinite amount. For 2011, the maximum taxable earnings amount for SS is $106,800, and a rate of 4.2% there is a lot of lost revenue there. I find it ironic as well that the people who need social security the least, namely the very well off are the ones who are effected the least by the SS tax. It is things like this that need to be changed.

tuna55
tuna55 Dork
4/8/11 10:49 p.m.
fritzsch wrote: I wish social security tax could be taxed up to an infinite amount. For 2011, the maximum taxable earnings amount for SS is $106,800, and a rate of 4.2% there is a lot of lost revenue there. I find it ironic as well that the people who need social security the least, namely the very well off are the ones who are effected the least by the SS tax. It is things like this that need to be changed.

I wish that there was an 'opt out' of SS. If it's really that good for us, we oughta be able to say "no" - we're not kids with vegetables.

killerkane
killerkane Reader
4/10/11 2:02 a.m.
tuna55 wrote: Let's play this game: What programs do you think COULD NOT be cut by at least 10% RIGHT FRIGGIN NOW. My answer: None. If I was in charge for a day, I would slash and burn. My Dad put it this way "I'd put every employee of every local, state and federal government on a list. Fire every other one and eliminate their position, that's a good start for the first day"

Then you would start a thread about unemployment...brilliant.

z31maniac
z31maniac SuperDork
4/10/11 7:45 a.m.
keethrax wrote: Flat rate tax is a terrible idea for tons of reasons, but that's neither here nor there. But that doesn't mean simplifying the tax codes to the point where loopholes are a lot scarcer isn't a good idea. EDIT: Short version: Rate and loopholes are two issues. You can have a very, very simple tax code and still not have a flat rate. So bringing up one in response to the other isn't terribly relevant.

You're EDIT sttill doesn't give us anything other than "a simple tax code does not HAVE to be a flat tax," I'm more interested in the reasons you say it's a bad idea (I'm not saying it's a good idea, I just want both sides of the argument.)

I'm personally for www.fairtax.org, I'd also like to hear your opinions for/against it as well.

Curmudgeon
Curmudgeon SuperDork
4/10/11 7:49 a.m.
Toyman01 wrote:
z31maniac wrote: Hey, I'm all about cutting. I advocate a 20% cut, across the board, across all programs, no loopholes/exceptions. Period.
This is the correct answer. If they cant figure out where to cut the budget, cut it all.

That's how SC's budget is done. It's run by something called the Budget and Control Board whose only reason for being is to administer exactly this type of budget cutting. The reason it is there and also its biggest problem is that it absolves anyone holding elective office from taking responsibility for goring anyone's ox or slaying their sacred cow. The Legislature shows up each year to go drinking and chase hookers and they push the responsibility for the hard budget cut decisions onto the B&C board who just slash everything across the board and the legislators tell the populace how those meanies are the ones who cut the budget, they have been trying to rein in these evil people for years. Then they go chase reelection.

It also puts this state in the uncomfortable position of doing dumb things like cutting the state trooper force (down 100 in the last couple of years) or buying worn out school buses from other states after they are done trashing them. Or not fixing the roads. Or having a town set up a radar speed camera system on I-95 to boost town revenue. http://articles.boston.com/2011-03-28/news/29360511_1_speed-cameras-surveillance-cameras-speed-limit

It's long past time to cut the BS out of the budgets (why is there a National Endowment for the Arts, for instance? Why is the Corporation for Public Broadcasting still there when you see 'Made possible by a grant from [insert large coropration here] before/after every show on PBS/ETV?) and focus government on the basics: infrastructure, defense and the few entitlements that might be necessary such as Medicare. Even Medicare has its problems and areas where costs can be cut, those are however based not in what's paid into them but rather on the costs coming out. Prescription drugs are a real budget buster. Price Advair sometime for an eye opener. Viagra is what, $14 apiece? That used to be covered by Medicare but they dropped it in 2007. For that matter, why the hell is Viagra covered by ANY kind of insurance plan?

The defense budget can be cut in many places without harming the 'boots on the ground' that do all the work. I have a buddy who installs those video walls; he put in one down at Kings Bay, GA about fifteen years ago. About five years later, a new commanding officer came in who decided that he had to have the biggest video wall on the East Coast and had my buddy remove a perfectly good and completely operational system merely to replace it with something to suit his overblown ego. That's the kind of stuff that should never happen but does.

Social Security is not going anywhere. It's too firmly entrenched. Might as well get used to it. So some changes need to happen to make it work: 1) raise the wage limit so higher paid people pay into the system 2) pay out based on means testing so those who retire with millions don't take away from those who didn't 3) get the legislator's fingers out of the SS surplus fund (which doesn't really exist anymore).

The National Flood Insurance program has been bastardized. Its original intention was to help those who could not afford private flood insurance. Instead it's morphed into something which allows millionaires to build ego houses in dangerous places and shove the responsibility for their poor decisions onto the taxpayers.

Agriculture subsidies go to the wrong people entirely in many cases. That shi+ needs to stop. Now.

Companies like GE not paying income taxes AT ALL on real profits is stupid. I understand needing to control costs etc but come on now. Down here, Boeing has nearly finished that plant to build 787's. The Interstate nearby has been reconstructed with a 10" layer of concrete on top of an asphalt base, it's to make sure trucks carrying really heavy stuff to the plant don't bust up the roads (but there is no mention of what will happen to the rest of the Interstates used for that transport) and it didn't cost them a dime. Boeing will jigger things around so they don't pay taxes (but their employees will) and when the incentives start to run out they'll go looking for somewhere else to build a new plant.

I got to be friends with the guy in SC who was in charge of the incentive package for the Mercedes plant that was built in Alabama. He read the thing, saw the $253 million in incentives offered, said 'this is stupid. They can have it' and thus Alabama got the plant. There is debate as to whethere Alabama will recoup its investment. By the way: as in many cases, if the incentives run out the company will merely shut its doors and go elsewhere. Check out the case of the Otis Elevator closing sometime.

I could keep rattling on for a while. But instead I'll shut up and go beat on the race car.

SVreX
SVreX SuperDork
4/10/11 8:26 a.m.

10%, or 20% cuts won't do it.

The 2009 Budget (Bush) had revenues of $2.7 trillion with a deficit of $407 billion (about 15%).

The 2010 Budget (Obama) had revenues of $2.3 trillion with a deficit of $1.17 trillion (about 51%).

The 2011 Budget (Obama- not enacted) had revenues of $2.2 trillion with a deficit of $1.65 trillion (about 75%).

Similar deficits are projected by the CBO through 2012.

Anybody else see a trend??

It's not about a 10 or 20% cut in expenditures. It's about a fundamental rethinking of what the heck we are doing.

93EXCivic
93EXCivic SuperDork
4/10/11 9:39 a.m.
tuna55 wrote:
z31maniac wrote:
93EXCivic wrote: In reply to z31maniac: Maybe as well as doing cuts in areas, we could also raise taxes here and there. I know it sucks to pay taxes but there comes a point when cutting isn't enough. I mean we could maybe try to get some corporations to pay taxes as well.
The corporate tax rate is what 35%, 2nd highest in the world and we should raise it? All corporate taxes do are tax you and me. Do you think if taxes are raised that companies will take the hit to their profits and not pass it along to the consumer? Or that they will not use more clever accounting rules to move income overseas so that it isn't taxable? Close that loophole and they'll exploit another..............if only the tax code were simpler........but again that's a different thread. www.fairtax.org
I would not suggest raising it, but I would recommend that more corporations pay it. See GE and National Instruments for two very good examples of this.

Exactly. That is my point not to raise taxes on corporations but to make corporations actually pay their taxes. But still the only way we are going to be able dig ourselves out of deficit is by cutting spending and raising taxes.

SVreX
SVreX SuperDork
4/10/11 10:04 a.m.

Digging ourselves out of debt requires cutting spending and raising taxes.

Digging ourselves out of deficit only requires leadership with the huevos to propose balanced budgets.

Xceler8x
Xceler8x GRM+ Memberand SuperDork
4/10/11 12:17 p.m.
Curmudgeon wrote: That's how SC's budget is done. It's run by something called the Budget and Control Board whose only reason for being is to administer exactly this type of budget cutting. ...Then they (state legislature) go chase reelection. ....I could keep rattling on for a while. But instead I'll shut up and go beat on the race car.

I liked all this stuff.

killerkane
killerkane Reader
4/10/11 3:34 p.m.

After WWII the highest tax bracket was set at 94%.

We complain about paying taxes now.

Think about it.

huge-O-chavez
huge-O-chavez SuperDork
4/10/11 3:54 p.m.
killerkane wrote: After WWII the highest tax bracket was set at 94%. We complain about paying taxes now. Think about it.

Yup... but they were interested in actually doing things then.

Those high tax rates + the rise of unions are the reason there is a middle class today... The great compression Krugman has called it and I think he nailed it..

Xceler8x
Xceler8x GRM+ Memberand SuperDork
4/10/11 7:17 p.m.

WWII also helped create the most educated populace in the history of the U.S. mostly due to the G.I. bill paying for higher education for returning soliders.

This could've also contributed to the rise of the middle class from 1950 on.

Curmudgeon
Curmudgeon SuperDork
4/10/11 7:40 p.m.
huge-O-chavez wrote:
killerkane wrote: After WWII the highest tax bracket was set at 94%. We complain about paying taxes now. Think about it.
Yup... but they were interested in actually doing things then. Those high tax rates + the rise of unions are the reason there is a middle class today... The great compression Krugman has called it and I think he nailed it..

Honestly, you'd be better off quoting anyone but Krugman. His columns run down here too, here's a synopsis of the average one: '[Blank] is an extremely expensive program with no way to properly measure the benefits to society as a whole but it tickles my fancy so we should fund it even if we have to pre-mortgage our Alpha Centauri settlements to do it. If you don't agree with me and turn your pockets inside out even though your kids may go hungry you are a big meanie and I will hold my breath until I turn blue. And then you'll be sorry.' Or even worse. His take on the shooting of Ms Giffords:

http://www.nytimes.com/2011/01/10/opinion/10krugman.html

When you heard the terrible news from Arizona, were you completely surprised? Or were you, at some level, expecting something like this atrocity to happen? Put me in the latter category. I’ve had a sick feeling in the pit of my stomach ever since the final stages of the 2008 campaign. I remembered the upsurge in political hatred after Bill Clinton’s election in 1992 — an upsurge that culminated in the Oklahoma City bombing. And you could see, just by watching the crowds at McCain-Palin rallies, that it was ready to happen again. The Department of Homeland Security reached the same conclusion: in April 2009 an internal report warned that right-wing extremism was on the rise, with a growing potential for violence.

So political violence is exclusively the province of right wingers. I guess he never heard of the Earth Liberation Front, the nice folks who burned a ski resort in Vail, burned a car dealership in Oregon, don't get me started. Of course a couple paragraphs in he mentions the shooter was mentally unstable; maybe all right wingers are? Yeah, right.

But back to the thread subject: Something has to give. Just like what happened with my family this past year, government income has to go up (taxes raised) and outgo has to drop (cut non essential spending) so we can get back on an even financial keel. It's way past time for all of us to start acting like adults whre the government is concerned.

We need to take more responsibility for our daily well being and government needs to quit paying for interpretive basketweaving.

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